Human capital - when people acquire skills and knowledge through experience and education
Physical capital - money, tools, buildings, equipment, machinery
Entrepreneurship - risk taker, innovative
Trade-offs - alternative that we sacrifice when we make a decision scarcity leads to trade-offs Example: farmer who plants tomatoes in one spot cannot produce corn in the same spot
Opportunity cost - the most desirable alternative given up as a result of a decision
Guns or Butter - trade offs that the government makes when choosing whether to produce more or less military or consumer goods
Can trade-offs be used for instance in a stock market exchange?
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